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63 Million US Households To Pay Bills Online By 2014

If you provide products and services to consumers what is your strategy to accept online bill payments? Do you have a strategy? Forrest Research predicts the adoption of online bill payment to continue to grow hitting 68 million US households by 2014. Read more...

The number of US households paying bills online will grow from 48 million this year to 63 million by 2014, according to a new forecast by Forrester Research Inc. (Nasdaq: FORR). The 5.4 percent compound annual growth rate reflects a maturing market where growth rates will shrink in the years ahead, but it also reflects a market that is not yet saturated. Forrester RoleView™ clients; subscribers to Forrester's ForecastView receive more detailed forecast data.

Forrester sees a shift in the online bill payment market as more consumers turn to banks and bill payment consolidators like Yodlee and Corillian because of several factors, including: the convenience of having multiple bills aggregated at a single Web site, the elimination of bill payment fees, and innovative marketing efforts to drive adoption. By 2012, consolidators' share of the online bill payment market will surpass direct billing by merchants for the first time.

Young consumers — especially young affluent consumers — will be a key battleground among financial services firms as the market matures. To date, this generation has shown less of an interest than older consumers to use aggregators such as banks for their online bill payment.

"eBusiness executives at banks need to work to establish earlier and stronger bill payment relationships with young affluents and other young adults," said Forrester Senior Analyst Edward Kountz. "To strengthen their position and better support these customers, banks need to add more payment options, deploy online and mobile alerts with greater visibility, and continue to hammer home the message that online bill payment is free."